- The Washington Times - Wednesday, January 4, 2006

Russian President Vladimir Putin honed his diplomatic skills as a KGB colonel during the 1980s in the Orwellian-named German Democratic Republic. Given such his background, it should hardly be surprising that he would celebrate the Russian New Year by tossing a nasty political bomb among his seven colleagues in the Group of Eight (G8) industrial democracies on the very day Moscow assumed the rotating presidency of that prestigious organization.

Having spent the past several years stomping on Russia’s already-troubled democratic institutions, including the rule of law and a nascent free press, Mr. Putin displayed an incomprehensible level of ingratitude for the undeserved honor his G8 colleagues had bestowed upon him. After pledging to emphasize the theme of “energy security” during Russia’s one-year tenure as G8 president, Mr. Putin began 2006 by generating huge natural-gas shortages throughout Europe, including Germany, France and Italy.

Making good on his threat to terminate the sale of natural gas to Ukraine over a pricing dispute, Mr. Putin’s actions also sharply curtailed the delivery of gas throughout Europe, which depends on Russia for 25 percent of its gas, upwards of 90 percent of which is delivered via pipelines transiting Ukraine. (Those pipelines bear the truly Orwellian names of “Brotherhood” and “Friendship.”)

Gazprom, Russia’s state-controlled gas monopoly, had been insisting that Ukraine’s price for Russian gas immediately increase from $50 per 1,000 cubic meters to $230. That’s the price most West Europeans pay. Since the implosion of the Soviet Union, Russia had been selling gas to former Soviet republics at a substantial discount, a practice Moscow is discontinuing over time. Ukraine, which agreed that the price would eventually have to rise substantially, nonetheless insisted that a preferential price agreement negotiated a few years ago was still in effect. Russia and Ukraine reached agreement yesterday to raise Ukraine’s price for Russian gas to $230 but also to significantly reduce gas supplied by Russia in favor of greater amounts of gas from Kazakhstan and Turkmenistan, whose prices remain well below Russia’s.

Without question, Mr. Putin’s efforts to nearly quintuple Ukraine’s gas price literally over night — and the heavy-handed shut-off when negotiators failed to reach agreement — were in response to Ukraine’s 2004 “Orange Revolution,” which resulted in the election of NATO-aspiring Viktor Yushchenko as president.

Russia’s pricing dispute with Ukraine could probably have been resolved much earlier if Ukraine had relented to Russian pressure on another front. Russia desperately desires to control the “Brotherhood” and “Friendship” pipelines in a joint venture with Ukraine, just as an increasingly authoritarian Belarus has agreed to give Russia joint control over its pipelines. But Ukraine refused.

Meanwhile, before Russia significantly increased shipments through the pipeline on Tuesday, supplies to Italy, which imports 34 percent of its natural gas from Russia, were down by 25 percent Monday. Shipments to France, which relies on Russia for 31 percent of its gas supply, fell by 30 percent. At the beginning of what has so far been an unusually cold winter, Germans, who depend upon Russia for more than 40 percent of their gas supplies, were not amused, including, presumably, the Stasi remnants who worked for then-Col. Putin during his KGB days as a Soviet enforcer. Mr. Putin may talk a good game about “energy security,” but his strong-armed actions, including shutting down trans-Russia gas shipments to Ukraine from Turkmenistan, spoke much louder. Other G-8 leaders may wonder why they ever expanded the G7 by welcoming an increasingly anti-democratic, authoritarian leader to their democratic club.

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